Mall’s new owners plan 2014 opening

They say the former Blue Mountain Mall holds potential to recapture sales tax dollars going to the Tri-Cities.

The former Blue Mountain Mall sits vacant.

The former Blue Mountain Mall sits vacant. Photo by Greg Lehman.

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WALLA WALLA — By this time next year, you may be able to stop by the old Gottschalks building for a new pair of shoes. Perhaps a tennis racket. Or an outfit for date night.

Although they can’t yet say which it will be, the new owners of the former Blue Mountain Mall site, who were in town Wednesday to scope out the property and meet with city officials, say their first redevelopment will take place in the buildings that are already whole.

“Reusing those buildings will be a lot quicker,” said Alan Gottlieb, the California-based real estate developer and president of Real Estate Affiliates.

In a purchase that closed last month, Gottlieb, codevelopers with L.A.-based Zelman Development Co. and a third partner with Somera Capital Management, bought the commercial property under a new limited liability company called Zelman Walla Walla LLC.

The first question after about five years of seeming stops and starts at the Rose Street site that also borders Poplar Street and Myra Road: Is this finally for real? Will the property actually be redeveloped and Walla Walla see the return of more regional and national shopping selections lost during the deterioration of the mall?

All signs point to yes.

Zelman’s specialty includes developing suburban office and large “power” retail shopping centers. It has long-standing tenant relationships with companies such as Target, Best Buy, Lowe’s Home Improvement, Home Depot, Linen’s N Things and Kohl’s. Its website includes a showcase of development success stories. The owners acknowledged the Walla Walla property as one of their more unusual finds.

“It’s a pretty unique position to be partially constructed like that,” said Zelman Development Co. Co-president Paul Casey.

Secondly: What’s coming to Walla Walla?

That answer is not yet certain. Nor is it public yet, owners say.

“What we’ve been working on so far is: one, understanding the property, and two, finding potential users,” Gottlieb said during a quick lunch downtown before catching a departing flight.

The steps include identifying potential users, completing negotiations and then submitting plans to the city, said Brett Foy, Zelman Development Co.’s other co-president.

“That’s the key to bringing the users to the site,” Foy said.

Negotiations with potential tenants are in the works. The owners are mum on naming who might be coming in but said ideal candidates are those not already in the marketplace. Included on the list of businesses in talks with Zelman Walla Walla are a grocery store, sporting good retailer, soft-good tenant/apparel shop, shoe retailer and a restaurant.

The new owners, who bought the property from Key Bank subsidiary OREO Corp., said the site holds potential to recapture sales tax dollars going to the Tri-Cities.

“This should be the hub,” Gottlieb said.

Zelman Development Co.’s other co-president, Paul Casey, said retail development simply hasn’t been in great demand since the start of the recession. The interest from potential tenants is a sign of recovery and a brighter retail future for the community, he said.

Although Walla Walla has seen very little population growth in the recent years, the developers believe the surrounding area is large enough to support new retailers without sacrificing what’s already here.

“Different retailers have different ways of looking at the market,” Foy explained.

Although the population of the county is between 55,000 and 60,000, retailers may estimate the property’s reach to be closer to 75,000 or 100,000 people when they factor in regional communities that also have less access to stores.

The new owners plan to develop the site in phases. The first will be re-use of the buildings that weren’t demolished. That may also include construction of a separate 12,000-square-foot building. It remains uncertain whether the Poplar Street pads that were partially constructed before a previous owner lost financing can be used or will need to be demolished.

Zelman Walla Walla intends to have tenants moved in and open for business by September 2014.

Comments

phoenix5blue 1 month, 3 weeks ago

Guess what people, it's 2015 and the Blue Mtn. Mall is still empty. New owners need to get on the ball.

1

dogman12 1 month, 3 weeks ago

The future of retail is an affiliation with Amazon, not a leased storefront. The site is a disaster and will likely stay that way.

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fatherof5 1 month, 3 weeks ago

Reading the comments in the U-B so often reminds me of those two old guys in the balcony on The Muppets Show.

I need to visit here less.

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fatherof5 1 month, 2 weeks ago

Thanks, dogman12. That's nice of you to say.

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marketinsider 1 month, 2 weeks ago

First I agree fatherof5. But, I actually think those two old guys on the Muppets Show are very funny. They don't give me the impression that they are depressed at all.

I have thought about offering another example, but I'm as lost as a duck in the desert.

What's a good example of people bickering back and forth, personally attacking, even attacking someone's username, and never getting anywhere?

My guess is that when children watch those two old guys they laugh, however, if kids were watching some of these strings being acted out live, I wonder what they would be thinking?

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dogman12 1 month, 2 weeks ago

Both downtown and the strip stores near Wal-Mart have vacancies. If I were searching for a location for a retail business, the renamed "Walla Walla Town Center" would present more unknowns and risks than other sites. There is no magnet to drive traffic, unlike those other two areas.

Unless the lease rates were very attractive, I would not locate there. The California owners may have had more cash than sense.

The "highest and best use" of the former mall site is as a wetland and pasture, which it used to be, with 5 spring fed creeks.

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namvet60 1 month, 2 weeks ago

And home to a herd of deer that I see looking out my back door every once in a while which I believe bed down in the Mall area.

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